Asked by
Ashish yadav
on Dec 19, 2024
Verified
Assume for a competitive firm that MC = AVC at $12, MC = ATC at $20, and MC = MR at $16. This firm will
A) realize a profit of $4 per unit of output.
B) maximize its profit by producing in the short run.
C) minimize its losses by producing in the short run.
D) shut down in the short run.
MC
Marginal Cost, the change in total cost that arises when the quantity produced changes by one unit.
AVC
Average Variable Cost; the total variable cost divided by the quantity of output produced, representing the variable cost per unit.
ATC
Average Total Cost, the per unit cost of production that includes all fixed and variable costs.
- Execute the strategy of marginal analysis to guide firm choices in thoroughly competitive market settings.
Verified Answer
NR
Learning Objectives
- Execute the strategy of marginal analysis to guide firm choices in thoroughly competitive market settings.
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